Ex-firefighter union chief suing city over a benefit

The former head of the San Diego firefighters union is fighting in court to get the city to honor a retirement benefit that was canceled two years ago after the IRS concluded that it violated federal tax laws.

In a lawsuit filed in September, Ron Saathoff asked the Superior Court to order the city to repeal an ordinance that canceled the benefit and pay him what he is owed from 2002 through 2008, with interest.

In the same lawsuit, a group of city firefighters is seeking reinstatement of a separate benefit that its members bought into but was canceled by the city after the Internal Revenue Service determined that it also violated tax laws.

At issue for Saathoff is the “presidential leave” benefit. In 2002, the city agreed to let Saathoff combine his salary as president of International Association of Fire Fighters Local 145 with his salary as a city worker for the purposes of determining his pension.

That benefit is also a key part of the two pending criminal cases involving Saathoff and other former members of the city pension board. The cases, one in state court and one in federal court, accuse Saathoff and other members of the board with self-dealing and fraud stemming from the retirement board approving a city proposal that put less money into the pension system than required, while at the same time the city was agreeing to pay out more in benefits in labor contracts.

Prosecutors in both cases contend that Saathoff got the benefit, and the pension boost, in return for his support of the underfunding deal. Saathoff has pleaded not guilty in both cases, and his lawyers contend that the presidential benefit — which other union presidents had been given years before — was not connected to the underfunding.

Even with the legal cloud hanging over the benefit, and the IRS ruling, Saathoff’s lawyer said he is still entitled to the benefit.

“The city lawfully entered into both of these benefits, and it’s obligated to perform on both of them,” Joel Klevens said. The City Council passed a resolution in October 2002 establishing the benefit, and Saathoff made regular contributions to the retirement system according to the terms of the resolution and a contract setting out the benefit, according to the lawsuit.

After the IRS concluded that the pension system could not pay the benefit because a union leader is not a city employee and therefore no longer a member of the plan, the council passed a second resolution in 2008 rescinding the previous resolution and halting the benefit. But Klevens said Saathoff made financial plans and other decisions based on getting the higher pension that the city had agreed to pay.

The city is facing similar lawsuits from former Municipal Employees Association President Judie Italiano and three former police union chiefs, said Gina Coburn, spokeswoman for the City Attorney’s Office. All seek restoration of the canceled presidential benefit.

In a statement, Coburn said the city charter prohibits any change in benefits without an ordinance and approval of a majority of the membership of the retirement system.